Australia: Changes to employers' obligations from 1 July 2014 - are you complying?

In brief - National employers must comply with new obligations under national workplace relations system

On 1 July 2014, changes took effect to the national minimum wage, Superannuation Guarantee contributions, transitional arrangements and penalty rates under the Restaurant Industry Award. The Restart Wage Subsidy also commenced on this date.

3% increase to minimum wage

The minimum wage increased by 3% as a result of the Fair Work Commission's annual wage review decision on 4 June 2014. The increase in the minimum wage affects national system employees who are covered by a modern award or industrial agreement, as well as employees who are not covered by either an award or industrial agreement.

Employers paying their employees under a modern award will need to review their pay rates to ensure they are paying their employees the correct amount.

For more information regarding the increase to minimum wages, please see our previous article Minimum wage to increase by 3% from 1 July 2014.

Award or agreement-free employees will need to be paid in accordance with the national minimum wage order. Currently, the national minimum wage rate is $640.90 per week, calculated on the basis of a week of 38 ordinary hours, or $16.81 per hour.

There are additional considerations that need to be taken into account for casuals, apprentices, junior employees and employees with a disability.

Further, the high income threshold has also increased to $133,000.

Increase in Superannuation Guarantee contributions

From 1 July 2014, the compulsory Superannuation Guarantee contributions have increased from 9.25% to 9.5%. This will eventually increase to 12% by July 2022.

Transitional arrangements in modern awards

In January 2010, the modern awards were introduced. The new rates in the modern awards were phased in over a four year period. As of 1 July 2014, these transitional provisions are no longer applicable and the full rates in modern awards are now in force.

Employers who are paying their employees in accordance with a modern award will need to ensure that they are no longer transitioning employees and are paying in accordance with the full modern award rate.

However, there are a few modern awards that contain award specific transitional provisions and as such, it is imperative that employers review the award prior to making any decision to change an employee's rate of pay or conditions.

Employers covered by a transitional agreement will also need to check that their minimum rates are not below the award rates.

Decrease in penalty rates for some casual restaurant employees

Significantly, as of 1 July 2014, the Sunday penalty rates for casual employees below the Level 3 classification have decreased by 25%.

For more information, the Full Bench decision can be located at Restaurant and Catering Association of Victoria [2014] FWCFB 1996.

Restart Wage Subsidy

The Australian government's Restart programme commenced on 1 July 2014.

The Restart programme is a wage subsidy paid to employers who employ and retain a worker who is over 50 years of age and who has been unemployed and on income support for at least six months.

Employers can receive up to $10,000 paid over four six monthly instalments, starting six months after the mature aged worker commences employment.

Employers interested in this scheme can visit the Restart Wage Subsidy website for more information.

For more information:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.